Lotteries are used in gambling systems where participants pay to enter or promotional systems where eligibility to enter is associated with the purchase of goods or services.
Most games of chance involving large numbers of participants are lotteries based on (a) sweepstakes, in which customers purchase lottery tickets, or (b) variants of LOTTO or KENO, in which customers either purchase a pre-allocated set of numbers, or purchase a group of numbers chosen by them in each case purchasing a ticket at a retail outlet. In some cases such purchases are conducted by mail. In all cases the organiser of the lottery will then select the winning numbers, in some form of random draw, which is often televised.
One disadvantage of these systems is that customers need to go to the retail out let to purchase the entrance ticket. Another disadvantage is that customers are required to retain their tickets, in order to redeem prizes if they believe they have won. LOTTO allows customers to select different numbers but suffers from the disadvantage that the prize pool may be shared between a number of participants—it is the nature of LOTTO that it cannot guarantee a single division one winner. Another disadvantage is the need to ensure that the selection of the winning tickets/numbers is truly random and is not subject to interference or fraud by any party.